UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION PJM Interconnection, L.L.C ) Docket Nos. ER Mid-Atlantic Interstate Transmission, LLC ) ER and ) ER Not Consolidated MOTION TO INTERVENE AND PROTEST OF THE RETAIL ENERGY SUPPLY ASSOCIATION Pursuant to Rules 214 of the Federal Energy Regulatory Commission s ( Commission s ) Rules of Practice and Procedure, 18 C.F.R , the Retail Energy Supply Association ( RESA ) 1 hereby files this Motion to Intervene and Protest in the abovereferenced proceeding where Mid-Atlantic Interstate Transmission, LLC ( MAIT ) seeks Commission approval of a change in the revenue requirement used to establish the transmission rates charged for the Metropolitan Edison Company ( ME ) and Pennsylvania Electric Company ( PENELEC ) Zones under the PJM Tariff. MAIT seeks acceptance of a forward-looking formula rate and files related protocols associated with its new stand alone transmission company that will own the jurisdictional transmission assets of ME and PENELEC. RESA seeks two modest changes to the protocols submitted with the transmission formula rate. First, RESA requests that the Commission order MAIT to provide the formula rate update on September 1, rather than October 31 each year. Second, RESA requests that the Commission order MAIT to 1 The comments expressed in this filing represent the position of the Retail Energy Supply Association (RESA) as an organization but may not represent the views of any particular member of the Association. Founded in 1990, RESA is a broad and diverse group of more than twenty retail energy suppliers dedicated to promoting efficient, sustainable and customer-oriented competitive retail energy markets. RESA members operate throughout the United States delivering value-added electricity and natural gas service at retail to residential, commercial and industrial energy customers. More information on RESA can be found at

2 - 2 - conduct quarterly meetings with interested stakeholders to provide updates and estimates of MAIT s transmission investment deployments that will be captured in the next formula rate annual update. In support of this Motion to Intervene and Comments, RESA submits as follows: I. MOTION TO INTERVENE A. Correspondence and Communications Correspondence and communications regarding this matter should be addressed to the following person(s), and the same should also be designated for service on the Commission s official service list for this proceeding: Elizabeth W. Whittle Joseph E. Oliker Nixon Peabody LLP Senior Regulatory Counsel 799 Ninth Street, N.W. IGS Energy Suite Emerald Parkway Washington, DC Dublin, OH (fax) ewhittle@nixonpeabody.com joliker@igsenergy.com B. RESA RESA is a non-profit trade association of independent corporations that are involved in the competitive supply of electricity. RESA and its members are actively involved in retail electricity markets throughout the United States, including retail markets in each of the Commission-approved RTO/ISOs. Many of RESA s members are active in PJM markets and the new MAIT area, in particular. C. Motion to Intervene On October 28, 2016, PJM and MAIT filed a forward-looking formula rate, protocols and tariff revisions to incorporate into the PJM Tariff, MAIT as a transmission owner. PJM filed in Docket Nos. ER and ER related filings associated with MAIT s admittance to PJM

3 - 3 - as a Transmission Owner. As active participants in PJM markets that will be allocated charges under the MAIT formula rate, RESA has an interest in this proceeding that cannot be represented by any other party. RESA respectfully requests that its Motion to Intervene be granted. II. COMMENTS RESA does not object to the integration of MAIT as a Transmission Owner in PJM. However, RESA seeks two modifications to the Formula Rate Protocols ( Protocols ) submitted as part of the formula rate filing: (1) the timing of the annual update filing; and (2) holding quarterly stakeholder meetings to detail what new investments are expected to be recovered through the next annual update. Under MAIT s proposal, MAIT will acquire ME s and PENELEC s transmission facilities and operate as a stand-alone transmission owner. ME and PENELEC become passive investors in MAIT. The formula rate is a forward looking formula rate with a true up and will take effect on January 1, There are a number of ancillary agreements with FirstEnergy Service Company, which is the owner of MAIT, and considered an affiliate. These include a Service Agreement for centralized administrative services and a Mutual Assistance Agreement. MAIT seeks a rate of return of 10.5%. The filing notes that there are plans for significant transmission investments, which means additional costs that will be recoverable through the formula rate. The Protocols accompany the formula rate filing. The Protocols describe the procedures that will apply to preparation and presentation of the annual informational update. The Protocols describe the mechanism for parties to review and obtain information about the annual update and

4 - 4 - provide a means for challenging the rate. MAIT notes in its filing that it has closely adhered to the policies and procedures expressed by the Commission in Midcontinent Independent System Operator, Inc. 2 except in a few circumstances, one of which is of concern to RESA. MAIT seeks to file its annual transmission rate update not on September 1 as is the general policy expressed in MISO, but at the end of October of each year. MAIT asserts that it has extended the date for submitting information requests, Preliminary Challenges and Formal Challenges to remain in line with some of the deadlines expressed in Commission precedent, in particular MISO. RESA does not oppose the forward looking formula rate construct for MAIT. However, RESA objects to the October 31 filing date of the MAIT annual update. The Commission should order MAIT to file its annual update no later than September 1 of each year. Otherwise, entities that must pay the rate will not have sufficient time to review, ask questions, appeal, if necessary, the information in the filing and plan and account for the rate when it becomes effective on January 1 of the next year. As the Commission is aware, the utility submitting an annual rate update must provide certain data, inputs and other material to allow entities to review it prior to the effective date of the new rate change. The Protocols provide avenues for interested parties to ask questions, seek additional information and provide to the utility formal objections to what is included in the annual informational filing. MAIT is a new entity and is just acquiring the assets of two formerly integrated investor-owned utilities. ME and PENELEC remain passive investors, but FirstEnergy will be managing the assets for MAIT. Thus, there is a new scheme of ownership, 2 Midcontinent Independent System Operator, Inc., 139 FERC 61,127 (2012), order on investigation, 143 FERC 61,149 (2013), order on reh g, 146 FERC 61,209, order on compliance filing, 146 FERC 61,212 ( MISO ).

5 - 5 - operations, regulation, rate collection, in addition to the implementation of a forward looking formula rate. Importantly, the rate will contain allocation of costs to MAIT from FirstEnergy that have never been reviewed. LSEs, such as RESA members, will be responsible for paying this new rate to the extent they transact in the relevant service area. It is critical for MAIT to provide the information contained in the informational filing no later than September 1 so that there is sufficient time in advance of the January 1 effective date to review and address any issues found in that review. Waiting until October 31, regardless of whether the deadlines to submit information requests align with those in MISO, is problematic. If LSEs or other interested entities are still receiving information close to the January 1 effective date, there is insufficient time for MAIT to incorporate any changes and file and implement the new rate by January 1 and insufficient time for LSEs to incorporate the new rate, as it may be modified, into its models for planning purposes. The September 1 deadline would also better enable competitive retail suppliers, like RESA s members, to properly reflect and account for the new MAIT zonal NITS rate in their forward retail price offerings. In short, RESA requests that the Commission order MAIT to make its informational filing by September 1 of each year. RESA also seeks modification to the Protocols to require that MAIT meet with interested stakeholders on a quarterly basis to provide an update on what is likely to be included in the annual update. This meeting need not be in person, but should provide an avenue for MAIT to provide transparency into MAIT s ongoing transmission investments that are expected to have meaningful impacts on the next annual rate update or related true-up adjustments. In particular, this meeting would allow market participants to better plan for expected large increases in the overall rate and to better understand the underlying cause. RESA would note that the currently proposed rate for January 1, 2017 ($15,112.00/MW/Year) reflects a nearly 50 percent increase

6 - 6 - compared to the currently effective rate ($22,612.39/MW/Year). This request is necessary because, as MAIT notes in its cover letter, it intends to engage in significant transmission investment activities. Those transmission investments and related expenses are likely to be large drivers of the forward-looking formula rate. In addition, FirstEnergy will be collecting an allocation of its costs to perform services for MAIT. Understanding this allocation and reviewing the amounts will be new for all interested entities. Providing for an update will allow LSEs like RESA members to plan for the rates that may become effective on the next January 1, in particular by reflecting these anticipated rate changes in retail price offerings extended to customers. During each quarterly meeting, RESA requests that MAIT provide both a forecasted projection of both: (i) the next upcoming forward looking NITS rate for the MAIT zone and (ii) any true-up adjustments expected to be included in the next annual rate update. RESA fully recognizes that these projections will only serve as estimates and will be subject to change. However it is important to provide market participants with additional ongoing insight into the expected NITS rate changes rather than only once per year. A quarterly meeting would provide vital information to LSEs, especially as MAIT starts up under this new transmission ownership scheme which is intended to serve as a vehicle for deploying significant future transmission investments with material impacts to the MAIT NITS rate.

7 - 7 - WHEREFORE, RESA respectfully requests that its Motion to Intervene be granted and that the Commission grant RESA s protest and require MAIT to file its informational report on September 1 of each year. RESA also requests that the Commission order MAIT to hold quarterly updates for LSEs and other interested parties as requested in this Protest. Respectfully submitted, Of Counsel: /s/elizabeth W. Whittle Elizabeth W. Whittle Counsel to The Retail Energy Supply Association Nixon Peabody, LLP 799 Ninth Street, N.W. Suite 500 Washington, DC ewhittle@nixonpeabody.com Dated: November 30, 2016

8 - 8 - CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing Motion to Intervene and Protest of the Retail Energy Supply Association via on each person listed on the Commission s official service list compiled by the Secretary in this proceeding. Dated in Washington, DC this 30 th day of November, /s/elizabeth Whittle Elizabeth W. Whittle